Colin Crouch*Colin Crouch is Professor of Governance and Public Management at the Business School of the University of Warwick. He is also an external scientific member of the Max Planck Institute for the Study of Societies at Cologne and a Fellow of the British Academy. His most recent books include Social change in Western Europe (1999); (with others) Local production systems in Europe: Rise or demise (2001); Postdemocrazia (2003) (in English as Post-democracy, 2004); (with others) Changing governance of local economies: Response of European local production systems (2004); and Capitalist diversity and change: Recombinant governance and institutional entrepreneurs (2005)., Martin SchröderMartin Schröder is a researcher at the Max Planck Institute for the Study of Societies, Cologne. His interests include political economy and economic sociology, welfare states, varieties of capitalism and research on firms. & Helmut VoelzkowHelmut Voelzkow is Professor of Comparative Social Sciences at the University of Osnabrück. He has published within the fields of economic sociology and comparative European sociology. His recent works include Jenseits nationaler Produktionsmodelle? Die Governance regionaler Wirtschaftscluster: International vergleichende Analysen (with Sabine Elbing und Martin Schröder, 2007); and Die Europäische Union – Marionnette oder Regisseur? (edited, with Patricia Bauer, 2004). * Warwick Business School, Warwick , CV4 7AL , UK E-mail: Colin.crouch@wbs.ac.uk Abstract This study seeks to go beneath the generalizations that constitute characterizations of national economies in order to examine local and sectoral diversity – in particular, forms of capitalist organization at the level of localized sectors. It reports on the findings of research based on detailed case histories of local economies in four different types of production: modernized craft manufacturing (furniture), mass production (motor vehicles), high-technology production (biopharmaceuticals) and high-tech services (television film-making). In each case a local economy in Germany (usually seen counter-factually as an example of a particularly national system) was compared with one elsewhere in Europe: respectively, southern Sweden, Hungary (compared with eastern Germany) and the UK (for two studies). In the analysis, companies act rationally in response to sector-specific challenges, being partly bound by the existing institutional framework that they encounter, but partly acting to alter it. Two possibilities are distinguished and found in the cases. In the first (structurally conservative) case, arrangements of governance in the national innovation and production system prove to be beneficial for the companies and their aim to stand up to international competition. Insofar as national institutions help companies to deal with competition on their markets, they will probably try to preserve these arrangements. In the second (innovative) case, companies turn away from the national context and develop their own local governance structure. If the national institutional structure is seen as not adequate or ‘non-fitting’ to deal with sectorally specific terms of competition, then the internal and external coordination of companies – in reaction to challenges posed by the market – is likely to deviate from the national structure. In some instances evidence of ‘creative incoherence’, where local deviation from the national model provides a creative impulse, is found.
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